PayPal is not pursuing an acquisition of Pinterest, the digital payments group said yesterday, after reports last week that it was in talks to buy the digital pinboard site for as much as $45 billion.
The development is a blow for Pinterest, which is grappling with the challenges of losing its co-founder Evan Sharp and a slowdown in user growth that has hampered its prospects.
The pull of Pinterest shareholders receiving some of the payment giant’s stock is off the table, as is the prospect of obtaining access to PayPal’s enormous number of users.
PayPal made only a one-line statement. Last week it was reported that the group had offered $70 per share, mostly in stock, for Pinterest.
Aided by a boost in digital payments during the pandemic, PayPal’s shares had risen more than 35 per cent in the past 12 months, giving it a market capitalisation of nearly $320 billion, before the reports on its talks with Pinterest.
However, PayPal’s shares have since lost 12 per cent, with experts and analysts blaming poor investor reception for the talks collapsing, while others highlighted challenges over integrating Pinterest within PayPal.
“An acquisition of Pinterest would introduce significant integration risk, notably in terms of culture and execution as running a platform primarily focused on driving user engagement and advertising would require PayPal to use muscles it isn’t accustomed to using,” Tien-tsin Huang, a payments analyst at JP Morgan, told clients in a note.
PayPal shares were up 3.6 per cent in midday trading. Pinterest’s shares, which had surged 13 per cent after the deal talks were reported last week, gave up nearly all its recent gains and fell about 12 per cent to $51.1 per share.